Feb

11

Szubin Says Sudanese Sanctions Suits Starting Soon

Posted by at 5:25 pm on February 11, 2008
Category: OFAC • Sudan
U.S. Embassy in Khartoum
US Embassy in Khartoum

Late last week Reuters reported that Adam Szubin, head of the Office of Foreign Assets Control (“OFAC”), announced that OFAC was stepping up its enforcement actions for violations of the U.S. sanctions on Sudan. According to Szubin, agents have built up a “queue” of enforcement actions against violators that will be rolled out in as early as a month’s time.

And Szubin is hoping to go for the big bucks:

Violating companies now face fines of up to $250,000 a breach or a charge of twice the offending transaction — a penalty that in some cases could run into millions, said Szubin. …

The recent increase in penalties for sanctions violators had strengthened OFAC’s hand, he added. …

Before the penalty increase, the company would have only had to pay up to $50,000 for each illegal sale — a charge that many organisations could write off.

“We’re now able to say, if your transactions totalled $40 million, and those were violative transactions, you could be facing a maximum penalty of $80 million. And that is no longer something that people will shrug off.”

This prospective uptick in enforcement actions, corresponds with increasing diplomatic parries between the U.S. and Sudan over the sanctions. According to a story in the Sudan Tribune, last year the government of Sudan had blocked 400 containers bound for the U.S. Embassy in Khartoum for failure to pay customs fees. The U.S. premised this non-payment on the Sudan sanctions and it was not until Sudanese president Omar Hassan Al-Bashir issued a decree granting an exception to the containers from custom fees that the containers were released. The Sudanese government later reversed its position and recently blocked entry of containers bound for the U.S. Embassy for non-payment of customs fees. In response, the U.S. has threatened to halt construction of a new U.S. Embassy in Khartoum. That construction has been underway for the past two years.

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Copyright © 2008 Clif Burns. All Rights Reserved.
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One Comment:

Well, there’s a little problem with their ex post facto penalty program that isn’t adressed by the case previously cited. That said, IEEPA was never intended to be authority for sanctions in response to ongoing diplomatic difficulties, as recornized in the opinion in which four justices joined in Regan v. Wald, and which was not contradicted by the majority opinion, which instead relied on the grandfather provisions. On the contrary, the legislative history of the act which included IEEPA also included language to the effect that permanent trade regulation was to be carried out, if at all, under the authority of the EAA section 6. As much as the embargo of Sudan may well be justified, it requires direct legislative authority, and not some contrived “emergency”.

Comment by Mike Deal on February 11th, 2008 @ 7:57 pm